Friday, December 19, 2008


Budish and Batchelder at The City Club, 1/9/09

Community Solutions is sponsoring The City Club's Friday Forum on 1/9/09 with new Speaker of the House Armond Budish and William Batchelder, Minority Leader of the House.

Phone: toll-free, 888-223-6786; locally, 216-621-0082


More Cuts in This Budget - What About Next Budget?

The most recent estimate of this budget’s deficit is $640 million. Today, Governor Strickland announced that they will fill the gap with budget cuts of $180.5 million, with the rest of the shortfall being met through Medicaid adjustments and various cash management strategies. These 5.75% (mostly) across the board cuts follow the September 4.75% cuts. Our revenue problems have been exasperated by the weakening national economy, and our budgets have seen drastic cuts.

We are hearing that we must all share in the sacrifices that are needed to get us through this. The question is, how do we do this. Hopefully, the $640 million in adjustments will get us through this budget. But as we look at next budget’s estimated $7.3 billion deficit at flat funding, we will need to look at all options and make the choices that do the last harm to the economy and Ohio’s future. Options include the Rainy Day Fund, temporary tax increases, examination of this decade’s tax reforms, and budget cuts.

When weighing whether to decrease government spending or raise revenues, we should appreciate government as a major part of our economy - every dollar cut is a loss of income to someone. It is particularly hard to cut the services that make up our safety net when more and more families are falling on hard times. Economists, including Barack Obama’s new budget director, Peter Orszag, recommend temporary tax increases for high income tax brackets over general tax increases or budget cuts. Ohio has increased income tax rates for high income brackets in past recessions, in both 1982 and 1992, and added a temporary sales tax increase during the last recession. Even with a federal economic recovery package, there will be tough choices, and we’ll have to consider all options.


Unique Look at Cuyahoga's Workforce

Community Solutions released today a unique study of Cuyahoga County’s workforce, completed for the Cleveland/Cuyahoga County Workforce Investment Board (WIB). 2008 Cuyahoga County Workforce Indicators, unique in its comprehensiveness, covers 11 dimensions of the workforce population:

Educational Attainment
Labor Force Participation
Unemployment Rate
Median Earned Income
Workforce Characteristics of Householders
Persons with Work Disabilities
Means of Transportation and Travel Time to Work
Persons Ages 16 and Over Attending School
Characteristics of Persons Looking for Work
Health Status and Employment

Find the full report at

Wednesday, December 03, 2008


This recession needs many solutions

We started December with a confirmation that the country has in fact been in recession since December, 2007. The news came at the same time that Governor Strickland announced an additional $640 million shortfall in the current budget, which brings us to the recession scenario as outlined by the Office of Budget and Management last January. This recession has already lasted longer than most, Ohio’s unemployment rate of 7.3% has exceeded its height of 6.3% in 2003, and we are expecting a third consecutive year of tax revenue declines. Meanwhile, we are allowing the continuation of income tax cuts along with a host of other tax reforms that are yielding decreased revenues. Ohio is relying on federal aid to states and strong holiday sales to avoid more budget cuts, but holiday shoppers face a recession too. Governor Strickland acknowledged today that we will need multiple solutions. Our Rainy Day Fund can be part of that solution, but depleting the entire fund wouldn’t get us far past the current budget, not to mention the $7.3 billion deficit currently projected for the FY2010-11 budget if spending remains level.

Of course, Ohio is not alone in its budget situation. 43 states face budget shortfalls. According to the National Conference of State Legislatures (NCSL), in FY 2009, 20 states have cut a total of $7.6 billion, and 30 states have shortfalls of another $30 billion.

President-elect Obama met with current and in-coming governors yesterday, and it is expected that a stimulus plan will come shortly after Obama takes office and will include aid to states. Leaders of the National Governors Association (NGA) and NCSL made recommendations on how to strengthen our economy, including state aid to avoid program cuts in countercyclical and safety net programs and immediate infrastructure investments that create jobs. Ohio is using the latter strategy with its job stimulus plan which offers effective investments which can be rolled out relatively quickly.

The aid to states would potentially be quicker and more substantial than it was in the last recession. As proposed by NGA, most of the state aid would fund infrastructure projects and some funds would temporarily increase the federal share of Medicaid. States would welcome this stimulus considering that, unlike the federal government, they (mostly) cannot deficit spend. The funds would allow state programs to meet an increasing need for services as more families meet hard times. The prospects of state aid and Ohio’s job stimulus plan offer hope, and we need to continue to find additional approaches to maintain essential services and Ohio’s economy.

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